Mar 1, 2006 – Hub International Limited to purchase insurance brokerages from Citizens Financial Group

Hub International Limited to purchase insurance
brokerages from Citizens Financial Group
CHICAGO–(BUSINESS WIRE)–March 1, 2006–Hub International Limited
(NYSE:HBG – News; TSX:HBG – News) announced today that it has agreed to enter into
a strategic alliance with Citizens Financial Group, Inc. (“CFG”). The alliance will be a
professional arrangement of the two industry specialists, leveraging their banking and
insurance expertise to provide expanded products, services and support to clients.
Hub and CFG have entered into an agreement pursuant to which Hub will purchase three
large insurance brokerages from subsidiaries of CFG: Citizens Clair Insurance Group
(Clair), based in Norristown (Philadelphia), Pennsylvania; Brewer & Lord, based in
Norwell (Boston), Massachusetts; and Feitelberg Insurance, based in Fall River,
Massachusetts. On a combined basis, the three brokerages had revenue of approximately
$45 million in 2005, and operate from 19 offices in Pennsylvania, Massachusetts, and
Rhode Island.
“We believe banking customers are best served when they have access to a full array of
financial services, including insurance, and we have provided those services through
three strong agencies within Citizens,” said Robert M. Mahoney, vice chairman of
Citizens Financial Group. “Our strategic alliance with Hub International will expand our
access to product offerings, locations and expertise, enhancing our competitive position.”
Martin P. Hughes, Hub International’s chairman and chief executive officer, said the
alliance creates the opportunity to reach thousands of clients currently affiliated with
Citizens Financial Group, while adding a strong pool of talent to Hub.
“The strategic marketing initiative between Citizens Financial Group and Hub will
strengthen our footprint in New England and Pennsylvania, while creating new
opportunities for the acquired brokerages,” Hughes said.
Mahoney commented, “While we achieved both revenue growth and profitability in line
with our strategies for the insurance brokerage business, we see a new opportunity to
serve our customers by partnering with Hub International as our insurance broker of
choice. Joint marketing efforts with Hub will enable us to bring a broader array of
insurance products and services to more of our retail and commercial customers in more
locations.”
With roots dating back to the 1920s, Citizens Clair Insurance Group (Clair) is one of the
largest insurance agencies in eastern Pennsylvania with annual revenue of approximately
$16.5 million. Founded in 1859, Boston-based Brewer & Lord has eleven offices
throughout Massachusetts and Rhode Island with annual revenue of approximately $19.7
million. Established in 1916, Feitelberg Insurance, based in Fall River, Massachusetts,
serves customers from six offices in eastern Massachusetts with annual revenue of
approximately $8.6 million. All three companies are full service brokers providing a
range of property and casualty, life and health, employee benefits, surety and personal
lines insurance products and services.
“The brokerages we are acquiring from Citizens Financial Group have the products and
distribution networks that mesh with Hub’s profile across the United States,” Hughes
said. “Theirs is a business model we are familiar with. The operations we are acquiring
are well-established and profitable, so consolidation is not likely to add great value at this
time,” he explained. “While we pride ourselves on our ability to integrate acquired
businesses, we also recognize that it is sometimes the best strategy to rely on what is
working effectively.”
The purchase price for the acquisition of the three brokerages is $80 million (inclusive of
tangible net worth) payable in cash on closing, as well as an earn-out based on future
performance. The earn-out payments, which will in the aggregate be at least $3 million,
will be payable over three years and, at Hub’s option, in cash or a combination of cash
and Hub common shares. Hughes indicated that he expects total consideration for the
transaction will be within Hub’s target multiple of 5-7 times EBITDA (earnings before
interest, taxes, depreciation and amortization). Closing of the acquisitions is expected to
occur in April 2006 and is subject to the satisfaction of regulatory and other customary
conditions. Hub has secured a financing commitment to fund the acquisition, but will
continue to investigate and evaluate all avenues for expansion capital.
Citizens Financial Group is the eighth-largest commercial bank holding company in the
United States with $155 billion in assets as of December 31, 2005. The bank holding
company operates branches in 13 states (Connecticut, Delaware, Illinois, Indiana,
Massachusetts, Michigan, New Hampshire, New Jersey, New York, Ohio, Pennsylvania,
Vermont, and Rhode Island) and non-branch offices in more than 40 states.
Headquartered in Chicago, IL, Hub International Limited is a leading North American
insurance brokerage that provides a broad array of property and casualty, life and health,
employee benefits, investment and risk management products and services through
offices located in the United States and Canada.
Mystic Capital Advisors Group, LLC provided transaction advisory services to Hub
International.

For more information on Mystic Capital, please contact Kevin P. Donoghue at 212-251-
0972 or visit www.mysticcapital.com
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